The New Jersey Supreme Court has ruled against the owner of Ocean Casino in a $50 million COVID-19 lawsuit against insurance companies. Ocean Walk, the owner of the casino, had purchased what it referred to as “best in class” coverage from American Guarantee and Liability Insurance Co., AIG Specialty Insurance Co., Interstate Fire & Casualty Co., and National Fire & Marine Insurance Co. However, the casino was forced to close in March 2020 due to an executive order from the governor in response to the COVID-19 pandemic. It eventually reopened with limited capacity on July 2, 2020, and returned to full operations in due course.
Ocean Walk put forth two arguments in the case. First, it claimed that it had suffered “direct physical loss or damage” as a result of the pandemic. Second, it argued that COVID-19 should not be considered a contaminant, as the policies contained a “contaminant exclusion” that included viruses. However, the Supreme Court rejected both arguments.
While Ocean Walk did not succeed in obtaining the $50 million it sought, it was granted a combined total of $850,000 from American, AIG, and Interstate Fire for business stoppages caused by a “communicable disease.” Despite this partial victory, it fell short of the desired outcome.
The casino’s legal battle and subsequent ruling have been closely followed by industry observers and experts, as it has significant implications for other businesses in similar situations. The issue of insurance coverage for losses due to the pandemic has been a contentious and complex one, with numerous business owners seeking compensation for the financial impact of COVID-19.
The decision of the New Jersey Supreme Court sets a precedent for similar cases across the state and potentially beyond, as businesses continue to grapple with the aftermath of the pandemic. The ruling may influence how insurance companies handle claims related to COVID-19 and could impact the outcome of future litigation in this area.
Overall, the verdict in the Ocean Casino case underscores the challenges faced by businesses in seeking compensation for pandemic-related losses and the complexities of insurance coverage in such unprecedented circumstances. It remains to be seen how this ruling will shape the landscape of insurance litigation in the post-pandemic era.